Untitled Quiz

Chapter 4 - Practical Ethical Decision Making

• Stakeholder rights include life, health and safety, a reasonable return on investment, freedom of speech, and fair treatment.
• The first resource for ethical guidance in business and accounting is often commonly accepted social norms, corporate codes, or ethical frameworks.
• The most common measure of shareholder well-being is profit/loss.
• Pastin's approach to stakeholder impact analysis includes rule ethics, ground rule ethics, end-point ethics, and social contract ethics.
• The modified moral standards approach includes utilitarian, individual rights, justice, and virtues.

Modified Pastin's Approach to Stakeholder Impact Analysis

• Ground rule ethics: Defines an organization's and/or individual's rules and values.
• End-point ethics: Determines the greatest net good for all concerned.
• Rule ethics: Determines the boundaries a person or organization should follow based on ethical principles.
• Social contract ethics: Determines how to resolve boundary concerns and conflicts.
• Virtue ethics: Determines if the motivations, virtues, and character traits demonstrated are ethical.

List of Ethical Decision-Making Pitfalls

• Focusing on short-term profit and impacts that only affect shareholders.
• Conforming to an unethical corporate culture.
• Misinterpreting public expectations.
• Focusing only on legalities ("if it's legal, it's ethical").
• Being biased toward a specific stakeholder group.
• Conflicts between personal vs. corporate interests.
• Failing to identify all stakeholder groups.
• Failing to rank the specific interests of stakeholders.
• Failing to assess well-being, fairness, and other rights.
• Failing to consider the motivation for a decision.
• Failing to anticipate actions of a decision affecting a specific group.

Character Traits

• Norms
• Moral judgment
• Virtues
• Values
• Ethical judgment
• Externalities
• Surrogates
• Future impacts
• Collateral damages
• Ethical costs

Virtue Ethics

• Focus on a person's character traits and virtues rather than their actions.

Stakeholder Impact Analysis

• Failure to identify all relevant stakeholder groups for effective analysis may result from bias, conforming to unethical corporate culture or conflicts of interest.
• For ethical decisions, virtues expected, benefits outweighing costs, and adherence to stakeholder rights and fair distribution of benefits/burdens must be considered.

Ethical Decision-Making Frameworks

• Consequentialism (well-offness)
• Deontology
• Virtue ethics
• Distributive justice
• Moral imagination

Stakeholder Impact Analysis

• Consideration of well-being/consequentialism, rights/deontology, fairness/justice and virtue considerations are important for determining ethical decisions.
• Expected values of a decision are measured by multiplying the value of an outcome by its probability.

Short Answer Questions-Chapter 4

• Discuss the practical steps to ethical decision-making (hiring, codes of ethics, training, and ethical climate).
• Detail the ethical aspects of codes of ethics within a company.

Chapter 5 - Corporate Ethical Governance & Accountability

• Corporations are accountable legally to shareholders and stakeholders.
• Internal auditors and ethics officers must report regularly to the Audit Committee of the Board of Directors.
• Principles are more helpful than rules when dealing with new situations.
• Codes must be reinforced by tone at the top, ethic officers and internal auditors and ethical culture.

Chapter 6 - Professional Accounting in the Public Interest

• Essential features of a profession include extensive training, a license or certification, and providing crucial services to society.
• Honesty, integrity, and objectivity are pivotal professional values.
• Professional accountants owe primary loyalty to the public.
• Moral reasoning stages include pre-conventional, conventional, post-conventional, and principled.

Chapter 7 - Managing Ethics Risks and Opportunities

• Dimensions of COSO Enterprise Risk Framework include strategic, operations, reporting, and compliance.
• Risk assessment involves assessing the potential for ethical risk, identifying activities, and using information and communication, and continuously monitoring activities.
• Ethics and ethical culture are essential in governance, risk assessment, information and communication, and control activities.

Chapter 7 - Stakeholder Pressure and Ethical Responsibilities

• Strategies for handling high and low threat/cooperation from different stakeholders includes monitoring, involvement and discussion and defending.
• The GRI recommends that companies report on economic, environmental, and social performance.

Chapter 7 - Financial Reporting Fraud

• Auditors have duties to consider in fraud, which include discussion/brainstorming, fraud triangle, interviews with management, and development of training programs.